NetworkNewsWire Editorial Coverage: Blockchain will be one of the defining technologies over the next 10 years. As the depth of its uses become more apparent, an increasing number of companies are claiming intellectual property rights for applications of the technology in numerous industries. Petroteq Energy Inc.’s (TSX.V: PQE) (OTCQX: PQEFF) (PQEFF Profile) blockchain-powered supply chain management platform will be utilized for its patented oil extraction process, while Bank of America Corp. (NYSE: BAC) looks to leverage blockchain to provide faster, securer financial services. Consulting giant Accenture (NYSE: ACN) is also in on the act, as is Mastercard, Inc. (NYSE: MA), which aims to improve payment procedures through recently patented technology. International Business Machines Corp. (NYSE: IBM) is looking across the blockchain possibilities, applying it to both payment systems and supply chains, with a focus on petroleum and chemicals.
One Technology, Many Uses
Blockchain is a system for recording and sharing information, including financial data. Because of the way that data is stored, control of the information is decentralized, removing the need for a single controlling point, and with it a single point of potential failure that is vulnerable to error and fraud. As a result, blockchain makes it easier to transfer data or money while reducing risks. It’s creating so much potential that more than half of the corporate executives and other experts consulted for a 2015 survey by the World Economic Forum’s Global Agenda Council on the Future of Software & Society predicted that 10 percent of GDP will be stored on blockchain technology by 2025.
Blockchain can be used to verify clients and products, leading to more secure records for industries including property and precious stones. Smart contracts that automatically pay out at the point of completion will securely automate business transactions. Decentralized record keeping allows more efficient supply chain management.
With so many possibilities at stake, it’s little wonder that so many companies are securing patents for blockchain services.
Bringing Blockchain Into the Energy Supply Chain
With its high-value transactions and complicated infrastructure, energy is one of the industries that could most benefit from blockchain software. Petroteq Energy Inc. (TSX.V: PQE) (OTCQX: PQEFF) recognized blockchain’s potential to revolutionize supply chain management as an immense opportunity, and was quick to integrate the technology into its operations.
Petroteq is a Canadian company looking to help America tap into its rich and, in some cases, untouched oil and gas deposits. Through the development and implementation of its proprietary environmentally friendly heavy oil processing and extraction technologies, it aims to access new sources of fuel. Its proprietary process produces zero greenhouse gas, zero waste and requires no high temperatures, reducing the impact of an industry often associated with environmental destruction. The company recently received notices of allowance from U.S. and Canadian patent offices covering its oil extraction technology (http://nnw.fm/Ck3dW).
Petroteq is currently focused on developing its oil sands resources and expanding production capacity at its Facility at Asphalt Ridge, Utah, where it expects to extract the equivalent of 87 million barrels of oil over the next 25 to 30 years. With its energy-efficient technology and economically run plant, this oil will create high profits through low production costs.
Notably, all industrial processes at the facility are expected to be on the company’s blockchain-powered supply chain management platform, Petrobloq, which was developed in partnership with First Bitcoin Capital Corp. (BITCF) (http://nnw.fm/Z8TpG). This system will address the lackluster global supply chain channels in the oil and gas industry, releasing the energy industry’s potential for profit.
The energy sector and its support services are built around massive centralized power plants, even though the industry has become more distributed in its production systems and management needs. This stands in the way of maximizing value, as systems are too inefficient for modern companies. Designed exclusively for the energy industry, Petrobloq will meet the distinct needs of oil and gas producers who are looking to extract greater profit from slimmer natural resources.
The decentralized digital ledger provided by blockchain can create a reliable and efficient platform for tracking energy trades, land title transactions, and the thousands of other interactions that make up the energy industry. Even as assets change hands, ownership can be accurately tracked, the results recorded in a blockchain rather than through a central database. Particularly in joint enterprises, a single record will be accessible to all parties, thereby supporting trust and efficient cooperation.
Blockchain-powered smart contracts will improve the speed and efficiency of transactions, radically changing the supply chain. Stored on blockchain, computer codes will automate payments and other interactions, facilitating the rapid processing of supply chain transactions.
“The entire non-hydrocarbon supply chain could be transformed with blockchain,” according to Mark Koeppen of Deloitte Consulting. “The interaction with thousands of suppliers, vendors and counterparties drives up complexity and cost but blockchain could help companies monitor compliance from their suppliers.”
Improving Transparency and Collaboration
For a heavily regulated industry like oil extraction, blockchain brings further benefits in supporting oversight and compliance. A supply chain system like Petrobloq will make it easier to monitor and report on processes, and so to detect non-compliance. A huge part of the regulatory burden will be shaken off, reducing costs for business and improving oversight for the public.
This is being achieved by Petroteq through a collaborative approach that extends beyond its work with First Bitcoin Capital.
“Our goal is to create the first oil extraction facility in the U.S. in which all industrial processes will be powered by our blockchain-based supply chain management system,” said Dr. Jerry Bailey, President of Petroteq. “We have an expansive vision to leverage technology to make a transformative impact on our industry, and we believe in the power of collaboration. We recently became members of Hyperledger, the open source collaboration to advance cross-industry blockchain technologies, and the American Petroleum Institute (API). We look forward to working with our colleagues across industries and borders to help create lasting improvements in efficiency while being mindful of our environment.”
While work on blockchain for energy is being led by small innovators like Petroteq, it has potential to benefit even the biggest players in the industry. Companies such as ExxonMobil (XOM) and Gazprom (GAZP) have the financial resources to soak up costs from inefficiency, but they also have the most to gain from streamlined tools such as blockchain. Adoption of blockchain technology could bring substantial increases in profits for these companies. It will also make it easier for them to answer the challenges of regulators and environmentalists, as their practices come under increasing scrutiny.
Blockchain Across Business
Bank of America (BAC), the second-largest bank in America and the largest wealth management company in the world, has the largest portfolio of blockchain patents — 27 referring to blockchain itself and 39 on the related technology of cryptocurrency. CEO Brian Moynihan has made clear that the bank is not interested in cryptocurrencies, the obvious area of concern for a bank. Instead, Bank of America is building up the potential for blockchain to increase efficiency across business.
Mastercard (MA), one of the largest payment processing companies in the world, prides itself on its forward-looking approach to finance, listing “Putting technology first” among its areas of focus. Like Bank of America, it has repeatedly shown an interest in blockchain but not in bitcoin. In a patent application filed on the 6th of May 2016, the application sets out details for a blockchain database that would reduce delays in payment transfers. The use of blockchain by such high-profile companies will aid the adoption of systems such as Petrobloq and cut externally driven inefficiencies from the energy supply chain.
Global consulting and professional services firm Accenture (CAN) has identified blockchain as an important tool in fostering trust and so supporting economic growth. As the company’s website points out, “middle- and back-office functions often remain antiquated, slow and inefficient thanks to overly complex processes involving many counterparties, manual tasks and third-party service providers.” Like Petroteq, Accenture is working on developing blockchain technology to cut out duplication and middlemen, improving the efficiency of administrative and financial transactions.
Technology giant IBM (IBM) is an unsurprising leader in blockchain technology, aiming to reduce cash cycle time, increase transaction visibility, and reduce overhead and intermediary costs. It has singled out the chemical and petroleum industries as ones that will particularly benefit from these technologies, thanks to faster financial transactions and the transparency that the system creates. The company is investing in developing blockchain technology to reduce the practice of maintaining records via antiquated, sole-source in-house methods, which are time-consuming and create risk through a single point of failure.
Blockchain is set to transform the energy supply chain. While the largest companies may eventually profit the most, innovative outsiders like Petroteq are the ones who will lead the way and ultimately hold the valuable patents that make it happen.
For more information on Petroteq Energy Inc. visit Petroteq Energy Inc. (TSX.V: PQE) (OTCQX: PQEFF)
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